Filling the Fulton Senior Center auditorium and standing three deep, more than 300 people  Chelsea residents and General Theological Seminary students and faculty  argued last week over the seminarys proposal to build a 17-story, mixed-use residential tower on the Ninth Ave. end of the seminary campus.

Seminary officials led by the dean, Reverend Ward Ewing, presented the case for the project, a partnership with the Brodsky Organization, intended to replace the deteriorating four-story Sherrill Hall with a tower of luxury apartments on top of a four-story base for seminary offices and library. The project is intended to realize $15 million to help pay for the restoration of the 19th-century buildings in The Close, the seminarys campus between Ninth and Tenth Aves. from 20th to 21st Sts., and insure the future of the institution in Chelsea.

But residents, homeowners and block association members at the forum were unrestrained in their outrage at a project that would exceed the 7.5-story height limit set by the city in 1970 and expanded in 1981 for the Chelsea Historic District, in which the seminary is located.

The heckling and interruptions began a half-hour into the meeting and continued intermittently for two hours.

When a member of Polshek & Partners, the architects for the project, tried to explain how the verticality of the tower would not compromise the dominant horizontality of the neighborhood, hecklers interrupted with derisive laughter and shouts, despite efforts by Walter Mankoff, a Community Board 4 vice chairperson, to restore order.

The final decision on whether the seminary would be allowed to exceed building height limits and, if so, by how much, will rest with the City Planning Commission and the Landmarks Preservation Commission, Mankoff noted. And with the courts, added a heckler, referring to neighbors previous threats to sue to block development that exceeds height limits.

Nevertheless, seminary officials noted that the campus has 240,000 square feet of development air rights, very few of which the project would use. The seminary was given the land in 1819 by Clement Clarke Moore, a seminary professor whose family founded the neighborhood and named it after the Chelsea district near London. The Close has long-neglected buildings; one that dates back to 1836 and desperately needs the $15 million that the project would bring. Although it is one of 11 seminaries in the U.S. that educates priests for the Episcopal Church, the seminary is not subsidized by the Church.

Seminary students told the forum that they love the school and the neighborhood and that they chose to attend G.T.S. because it is in an urban environment and gives them the chance to work as volunteers in organizations that serve people of all races and creeds.

Supporters of the proposal noted the seminarys contribution to the neighborhood, including a daycare center open to children from the community, as well as seminary families, and a shelter for homeless men.

But longtime Chelsea residents said that G.T.S. should find alternative ways to raise the money it needs to restore and maintain its historic buildings. Bill Borok, president of the Council of Chelsea Block Associations, said a17-story building, which he dubbed The Tower of Babel, would be a wide-open invitation to other developers to come to Chelsea and build projects as tall and as dense as possible.

Steve Shore, a resident and real estate lawyer, agreed that a 17-story residential tower would be the first of many. It will have set a precedent and developers and lawyers love precedents. The floodgates will open, he predicted.

Robert Trentlyon, a W. 21st St. resident and C. B. 4 member, insisted that a low-rise alternative could generate enough revenue to solve the seminarys problems. Ive been talking to brokers who tell me there are no 20,000-square-foot retail spaces south of 23rd St. and that high-end retailers are willing to pay $120 to $150 per square foot for that kind of space, said Trentlyon, adding, A seven-and-a-half-story building on Ninth Ave. with that kind of space might be a happy medium, for the community as well as the seminary.

But Maureen Burnley, G.T.S. executive vice president for operations and development, said the Brodsky Organization, the seminarys development partner, has determined that 17 stories are necessary to generate the revenue that G.T.S. needs and a profit for the builder.

Marion Buhaiger, owner of a 120-year-old building on W. 20th St. across from the seminary, asked why the seminary has had a problem paying for maintenance. I have three rent-controlled tenants in my building and Im still able to maintain it, she said. Although the seminary may be cash poor, it is rich in acres, and with that wealth of space it is outrageous to grab at the air space of the community, Buhaiger said.

However, the open pace and gardens inside the walls of The Close are part of the heritage worth saving, seminary students and faculty said.

Some Chelsea residents spoke in favor of the project. One of them, Matt Foreman, executive director of the National Gay and Lesbian Task Force, urged neighbors to support the seminary project. General Theological Seminary has opened its doors to gays, women priests, advocacy for the homeless and has been a force for social justice. It is beleaguered by reactionary elements in the Episcopal Church. And it is an important institution that needs our support, Foreman said.

But some neighbors resented what they felt was the seminarys holding itself as a private enclave separate from the community. One resident found fault with the way the seminary posted notices of the Nov. 21 forum. None of the posters mentioned that it is a 17-story building, she said.

Steve Cohen, a resident of 21st St. for 21 years, said the seminary has not learned to live within its means and appears to think it is above the law that applies to the rest of us living in a historic district.

One constant heckler, Gilbert Michel Rolle, a Chelsea resident for eight years, found fault with community board members who met in August at the seminary for a preliminary outline of the project.

Mankoff told the crowd that other meetings on the project will be held as part of the city review process.